Pringle action over ESM dismissed in Europe's highest court

Europe’s highest court has dismissed a challenge by Independent Donegal TD Thomas Pringle to the European Stability Mechanism, the permanent bailout fund from which Dublin hopes to draw aid for the surviving Irish banks.

Mr Pringle said he was disappointed with the result and expressed worries that he might be liable for the costs of the action he initiated.

Approving the formation of the ESM, the European Court of Justice ruled yesterday that there was nothing in EU law to prevent the euro zone countries establishing such a fund.

The ESM does not breach the “no-bailout clause” in European law, the court said, and member states were entitled to introduce the fund before a looming change to the EU treaties which says that euro zone countries may set up a stability mechanism.

“The challenged amendment creates no legal basis for the EU to be able to undertake any action which was not previously possible,” the court said.

“The amendment . . . merely confirms the existence of a power possessed by the member states,” it added.

“Since that decision does not confer any new power on the member states, the right of a member state to conclude and ratify the ESM treaty is not subject to the entry into force of” the change.

The case followed on from Mr Pringle’s Supreme Court appeal to the High Court’s dismissal of his challenge in April to Ireland’s participation in the €500 billion ESM.

Mr Pringle’s challenge was heard last month in Luxembourg by all 27 judges of the European court under a fast-track procedure. “I am disappointed the Court of Justice did not agree with our interpretation of the ESM and the impact it will have on the European Union and the European treaties,” said Mr Pringle. “I think it was vitally important, however, that this ESM would be tested in the highest court possible and we’ve achieved that by having the questions referred to the ECJ.”

He was concerned about the cost of undertaking the legal action, but felt it was vitally important to take the case. Deciding who pays, him or the taxpayer, will be a matter for the courts here. – (additional reporting by Colin Gleeson)